👀 Something interesting is happening behind the scenes at the Fed.
The Fed balance sheet just expanded again.
In February, it increased by $42B, reaching $6.63T — the highest level since last August.
Since the RMP program started in December, roughly $93B of liquidity has quietly entered the system.
Most of it comes from the Fed buying about $40B of T-bills every month.
At the same time, MBS holdings are still shrinking as mortgages continue to roll off the balance sheet.
But here’s the key point:
The structure is changing.
The Fed is reducing MBS, but increasing T-bill holdings.
So while it looks like quantitative tightening on paper…
liquidity is still being added to the system — just in a different form.
Translation in simple terms:
🟠 The Fed says it’s tightening.
🟠 But the balance sheet is quietly expanding again.
And when liquidity slowly returns…
risk assets usually notice first. 👀📈
